The vocational option for year 11 and 12 students may end up chalk dust for some schools. Photo: Quentin Jones

The teachers union says the funding cuts could lead to the vocational option disappearing from some schools and a reduction in the number of students who complete year 12.

The Victorian Certificate of Applied Learning has been offered in Victoria since 2003 as part of a strategy to discourage young people from dropping out of school.

However, Skills Minister Peter Hall told The Age the additional $12 million funding allocated to schools to co-ordinate the program every year was no longer needed as it was now well established in schools and local communities.

''There is no reason why any student should be disadvantaged by this measure,'' he said.

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About 18,000 students are enrolled in the Victorian Certificate of Applied Learning, which is a senior secondary qualification that focuses on practical work experience and employment skills. The certificate is an alternative to VCE for students who want to go on to apprenticeships, TAFE or work rather than university.

Ballarat Secondary College principal Paul Rose said his school, which currently has 70 students doing the certificate,

would have to assess whether it could still run the program following the budget cuts.

He said the college would lose $52,668 a year in funding, which was now used to pay a teacher to co-ordinate the program, including negotiating work placements for students outside the school.

''We service the lowest socio-economic area in Ballarat and have had a high success in getting people in employment in the past,'' Mr Rose said. ''With no budget re-allocation for VCAL co-ordination, we will face significant difficulties in maintaining that program. It's absolutely appalling.''

Catholic and government schools and TAFEs, which offer the Victorian Certificate of Applied Learning, are currently eligible for between $12,000 and $126,000 a year, depending on the number of students enrolled.

Australian Education Union state president Mary Bluett said the cuts would lead to job losses and the Victorian Certificate of Applied Learning disappearing from some schools.

''Small rural schools will be the hardest hit because they don't have money they can take from other programs,'' Ms Bluett said.

''The government has set up these pilots and taskforces to look at lower year 12 completion rates in rural schools and now they are nobbling a program that has been kicking goals in terms of keeping rural kids at school. It's gob-smacking.''

Opposition education spokesman Rob Hulls said the government had promised its $481 million in cuts to the Education Department would not impact on students and programs.

''This proves that not to be the case. The government is saying we don't give a damn about disengaged youth, we are prepared to let them sink.''

But Mr Hall said every student who was enrolled in the Victorian Certificate of Applied Learning would continue to receive funding.

''What we are talking about was an additional co-ordination payment,'' Mr Hall said.

''We had to look at some savings and this was an area where we reprioritised to implement the positive measures in the budget.''

Mr Hall said while the Victorian Certificate of Applied Learning had initially been a fast-growing program, the number of students had plateaued over the past three years.